Bahrain-based Gulf International Bank has said that its current intention is not to exercise the redemption option on its $400 million subordinated step-up floating rate notes due in 2015.

The bank has the option to redeem the debt on the interest payment date falling in September next year but that it did not at present plan to take this option due to prevailing adverse market conditions and economic conditions.

The notes are still redeemable on any interest payment date after the call date.

The company intends to review its decision not to call the notes from time to time in light of then prevailing market conditions and the financial position of the company. Any notice to call would be given not more than 60 nor less than 30 days’ prior to the due date fixed for redemption.

"The company values its relationship with the holders of the notes as important stakeholders in its business and it will continue to monitor market conditions until the call date," a spokesman said.

Meanwhile, the company intends to launch a cash tender offer shortly and invite holders of the notes to offer to sell for cash to the company a limited amount of their notes in a modified dutch auction, subject to the terms and conditions of the tender memorandum, to be issued in connection with such cash tender offer. – TradeArabia News Service